Perhaps there would not have been any in-opportune time for the real estate firms in Hyderabad, the word "Telangana" has frightened them so heavily that they may not even think of investing further in city for at least few years.
The real estate industry, shaken by the US subprime turmoil and subsequent economic recession, has been reeling under tremendous pressure for the past one and half years or so. Even, when the chips were down, The real estate and construction business in Hyderabad was looking forward to election results which was proving to be a major turning point, considering the kind of political risk, as perceived by realtors, was taken into account, if TDP-TRS led grand alliance got catapulted to the echelon of power in the state. Therefore every realtor doing business in Hyderabad gave thumbs-up to a congress win in the last general elections, both at state and central level.
Further, the recent positive developments in the job market and stock market rally, like real estate in any other city, have helped the Hyderabad real estate to regroup and regain some lost momentum in the last couple of months. The heightened activity propelled many who's who of the real estate companies announcing the new projects, particularly in the mid and affordable housing segments in the suburbs of Hyderabad city.
Complete Turnaround in Mood
Ever Since Mr. Chandrasekhar Rao (popularly as KCR) announced that he would go on hunger strike to achieve statehood for Telangana, the Real Estate players were feeling nervous and maintaining caution while holding back their expansion plans. Now, with the Telengana agitation gaining momentum the real estate sector received a jolt and may harm the interests of the real estate companies, specially those dealing with projects in the suburbs of Hyderabad city. "We have witnessed significant increase in number of enquiries and site visits till a couple of weeks ago, in fact, we were able to sell almost 50% of the units in the last 2 months, but now with Telangana issue coming onto centre stage, we see a sudden drop in the enquiries" says Mr. Venkat, MD Cyber Constructions. We had plans of going aggressive with land acquisition for our next project, but with these recent developments we see a major political risk and decided to hold back our plans till we hear some news on the future of Hyderabad, adds Mr. Venkat.
Speculators might be back in business
Due to the perpetual slump in real estate and the congress party, who's election spearhead, Late Dr. Rajasekhara Reddy coming back to power, the speculators were completely out of sorts in the Andhra Region. There was huge speculation built up prior to the elections that the real estate prices in cities like Vijayawada,Guntur,Vizag and Nellore were hyped so high that even the speculators would have imagined.But all this hype proved wrong and Hyderabad real estate turned out to be the beneficiary of the election results and economic recovery. This was the case till recent time.
Hyderabad's loss could be Andhra cities gain
Now, the Telangana agitation gaining momentum, the future of Hyderabad city might be a topic for the debate in coming months, therefore, the natural beneficiary of this would be Andhra Region, where the real estate prices, particularly property prices in cities like Vizag, Kakinda, Rajahmundry, Vijaywada,Guntur,Nellore and Tirupati might see a northward move with speculators turning to these places betting on the division of the state in the two or three parts. Even, dark horses like Kurnool might assume center stage if the a future capital of the Andhra region is going to be discussed.
"Land prices in Nellore and Tirupati have not corrected to an extent of the prices in Vijyawada and Guntur belt where the speculators were most active, so for some one who has got presence across Andhra Pradesh may not be hit that bad, only the companies heavily focused in Hyderabad real estate might be the worst hit. They should diversify the risks by expanding their foortprint to other parts to of the state so the negative effect will be neutralized somewhat" Says Mr. VV, a real estate agent who deals with land sales all over Andhra Pradesh.
Whoever is looking at long-term prospects and want to invest in land for genuine reasons should not worry too much, whether it is Hyderabad real estate or Vizag real estate, the investors are bound to gain in the long run. Only the speculators who bet on quick bucks by changing hands and whoever does dubious deals without owning a property are the ones face wrath of the ups and downs of the market, Mr. VV adds.
So, the morale of the story is, if you are an investor, do not worry, you can still hold on to your piece of land or apartment in Hyderabad, unless one takes decision based on Telangana sentiment.
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